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Fraser Institute

Young people increasingly embrace conservatism

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From the Fraser Institute

By Philip Cross

One of the most intriguing recent political trends in North America is the growing support for conservative parties among young people. Once a reliable source of overwhelming support for the elections of Barack Obama and Justin Trudeau, a rising share of the youth vote is trending towards candidates such as Donald Trump and Pierre Poilievre. Young people voting for conservative politicians could be dismissed as just a backlash against failed economic policies, but there are indications of a more fundamental shift to embracing at least some conservative values.

Canadian youths now support the Conservatives more than any other party, a development not seen in decades, if ever. According to an Abacus poll, 36 per cent of Canadians between 18 and 29 years old would support the Conservatives versus 27 per cent for the NDP and a paltry 19 per cent for the Liberals. Nor is support for Poilievre’s Conservatives just a backlash from the failing fortunes of youths under the Trudeau regime. An Environics polls found young people in Canada would vote for Trump more than any other age group: 28 per cent of Canadians between 18 and 34 years old prefer Trump versus 13 per cent for those 55 and over and 27 per cent between 35 and 54.

Faced with a health-care system that’s clearly broken in Canada, youths have fewer qualms about involving the private sector than older generations who were raised to believe that publicly-provided health care was a fundamental Canadian value. A recent poll by Leger published in Le Journal de Quebec found that 44 per cent of youths 18 to 34 years old support private delivery of health-care services, the mirror image of the views of people 55 and over who oppose it. Meanwhile, youths in the United States identify as having more conservative views than their parents even more than millennials did 20 years ago, with the largest shift among young men.

Rising support for conservative politicians and initiatives among young people reveals several trends. Most obviously is that many of today’s youths reject the radical woke agenda espoused by a small but vocal minority. When confronted with the reality of an economy that’s not generating the jobs, incomes and housing they desire, these youths prioritize results over ideology, especially immigrant youths who came to Canada for economic reasons. The importance attached to results is driving many youths even to question the usefulness of democracy. In his 2023 book The Fourth Turning Is Here, historian Neil Howe cites polls that one in four young Americans would prefer a dictatorial president unconstrained by Congress while only one in 10 Americans over age 65 agree.

Howe’s analysis is based on the proposition that historical movements move in cyclical ebbs and flows rather than by extrapolating straight lines. This is intuitively easy for me to understand after a career specializing in the study of business cycles. It’s well known that there are regular cycles in financial markets and the economy, partly because long periods of prosperity and bullish financial conditions lull the next generation into under-estimating the risks of a downturn. This complacency inevitably precipitates the sort of risky decisions that trigger a slump. As economist Hyman Minsky wrote, “Success breeds a disregard of the possibility of failure… Stability leads to instability. The more stable things become and the longer they are stable, the more unstable they will be when the crisis hits.”

Cyclical analysis is also useful in understanding political trends instead of just assuming history continues on a linear trajectory. For example, for years it seemed inevitable that support for Quebec separatism would rise inexorably until independence was achieved. Instead, support peaked during the 1995 referendum then steadily evaporated as younger generations had more pressing priorities than independence.

We see the same cyclical phenomenon play out in the political preferences of today’s youths, even if conservatives still represent only a minority and their longer-term commitment to conservative values remains uncertain. Instead of reinforcing the left-wing bias of youths that helped propel Obama and Trudeau to power, youths are reacting against the status quo that ignores their pocket-book concerns. These shifting attitudes of young people could help reshape North America’s political landscape in ways few would have thought possible a decade ago.

Business

New climate plan simply hides the costs to Canadians

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From the Fraser Institute

By Kenneth P. Green

Mark Carney, who wants to be your next prime minister, recently released his plan for Canada’s climate policies through 2035. It’s a sprawling plan (climate plans always are), encompassing industrial and manufacturing emissions, vehicle emissions, building emissions, appliance emissions, cross-border emissions, more “green” energy, more “heat pumps” replacing HVAC, more electric vehicle (EV) subsidies, more subsidies to consumers, more subsidies to companies, and more charging stations for the EV revolution that does not seem to be happening. And while the plan seeks to eliminate the “consumer carbon tax” on “fuels, such as gasoline, natural gas, diesel, home heating oil, etc.” it’s basically Trudeau’s climate plans on steroids.

Consider this. Instead of paying the “consumer carbon tax” directly, under the Carney plan Canadians will pay more—but less visibly. The plan would “tighten” (i.e. raise) the carbon tax on “large industrial emitters” (you know, the people who make the stuff you buy) who will undoubtedly pass some or all of that cost to consumers. Second, the plan wants to force those same large emitters to somehow fund subsidy programs for consumer purchases to offset the losses to Canadians currently profiting from consumer carbon tax rebates. No doubt the costs of those subsidy programs will also be folded into the costs of the products that flow from Canada’s “large industrial emitters,” but the cause of rising prices will be less visible to the general public. And the plan wants more consumer home energy audits and retrofit programs, some of the most notoriously wasteful climate policies ever developed.

But the ironic icing on this plan’s climate cake is the desire to implement tariffs (excuse me, a “carbon border adjustment mechanism”) on U.S. products in association with “key stakeholders and international partners to ensure fairness for Canadian industries.” Yes, you read that right, the plan seeks to kick off a carbon-emission tariff war with the United States, not only for Canada’s trade, but to bring in European allies to pile on. And this, all while posturing in high dudgeon over Donald Trump’s plans to impose tariffs on Canadian products based on perceived injustices in the U.S./Canada trade relationship.

To recap, while grudgingly admitting that the “consumer carbon tax” is wildly unpopular, poorly designed and easily dispensable in Canada’s greenhouse gas reduction efforts, the Carney plan intends to double down on all of the economically damaging climate policies of the last 10 years.

But that doubling down will be more out of sight and out of mind to Canadians. Instead of directly seeing how they pay for Canada’s climate crusade, Canadians will see prices rise for goods and services as government stamps climate mandates on Canada’s largest manufacturers and producers, and those costs trickle down onto consumer pocketbooks.

In this regard, the plan is truly old school—historically, governments and bureaucrats preferred to hide their taxes inside of obscure regulations and programs invisible to the public. Canadians will also see prices rise as tariffs imposed on imported American goods (and potentially services) force American businesses to raise prices on goods that Canadians purchase.

The Carney climate plan is a return to the hidden European-style technocratic/bureaucratic/administrative mindset that has led Canada’s economy into record underperformance. Hopefully, whether Carney becomes our next prime minister or not, this plan becomes another dead letter pack of political promises.

Kenneth P. Green

Senior Fellow, Fraser Institute
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Business

Government debt burden increasing across Canada

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From the Fraser Institute

By Tegan Hill, Jake Fuss and Spencer Gudewill

As governments across Canada unveil their 2025 budgets, outlining their tax and spending plans for the upcoming fiscal year, they have an opportunity to reverse the trend of deficits and increasing debt that has reigned in recent years.

Indeed, budget deficits, which fuel debt accumulation, have become a serious fiscal challenge for the federal and many provincial governments, primarily due to high levels of government spending. Since 2007/08—the final fiscal year before the financial crisis—combined federal and provincial net debt (inflation-adjusted) has nearly doubled from $1.2 trillion to a projected $2.3 trillion in 2024/25. And you can’t blame COVID, as combined federal and provincial net debt (inflation-adjusted) increased by nearly $600 billion between 2007/08 and 2019/20.

Federal and provincial net debt (inflation-adjusted) per person has increased in every province since 2007/08. As shown in the below chart, Newfoundland and Labrador has the highest combined (federal and provincial) debt per person ($68,516) in 2024/25 followed by Quebec ($60,565) and Ontario ($60,456). In contrast, Alberta has the lowest combined debt per person ($41,236) in the country. Combined federal and provincial net debt represents the total provincial net debt, and the federal portion allocated to each of the provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

The combined federal and total provincial debt-to-GDP ratio, an important fiscal indicator that compares debt with the size of the overall economy, is projected to reach 75.2 per cent in 2024/25. By comparison, the ratio was 53.2 per cent in 2007/08. A rising debt-to-GDP ratio indicates government debt has grown at an unsustainable rate (in other words, debt levels are growing faster than the economy). Among the provinces, the combined federal-provincial debt-to-GDP ratio is highest in Nova Scotia (92.0 per cent) and lowest in Alberta (42.2 per cent). Again, the federal debt portion is allocated to provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

Interest payments are a major consequence of debt accumulation. Governments must make interest payments on their debt similar to households that must pay interest on mortgages, vehicles or credit card spending. When taxpayer money goes towards interest payments, there’s less money available for tax cuts or government programs such as health care and education.

Interest on government debt (federal and provincial) costs each Canadian at least $1,930 in 2024/25. The amount, however, varies by province. Combined interest costs per person are highest in Newfoundland and Labrador ($3,453) and lowest in Alberta ($1,930). Similar to net debt, combined federal and provincial interest costs are represented by the total of the provincial and federal portion with the federal portion allocated to each of provinces based on a five-year average (2020-2024) of their population as a share of Canada’s total population.

Debt accumulation comes with consequences for everyday Canadians as more and more taxpayer money flows towards interest payments rather than tax relief or programs and services. This budget season, federal and provincial governments should develop long-term plans to meaningfully address the growing debt problem in Canada.

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